Question to the Department for Education:

To ask the Secretary of State for Education, how much funding her Department plans to provide for the early years free hours entitlement to each local authority; and what guidance her Department has issued to providers on the costs that this funding should cover.

The department is determined to support as many families as possible with access to high quality, affordable childcare, which is why the 2023 Spring Budget announced significant new investments to expand the free early education entitlements from April 2024. Further, at the 2024 Spring Budget the department committed to increasing the national average hourly funding rate to deliver the entitlements in line with the metric used at Spring Budget 2023, in the 2025/26 and 2026/27 financial years to reflect key cost providers face, at an estimated £500 million of additional investment over the two financial years, based on current forecast.

The department expects to provide over £4.1 billion by the 2027/28 financial year to facilitate the expansion and to be spending in excess of £8 billion every year overall on free hours and early education entitlements. This is the single biggest investment in childcare in England ever.

In 2024/25 alone, the department expects to provide over £1.7 billion to support local authorities and providers to deliver the expansion. On top of this, the department is increasing the 2024/25 hourly rates to local authorities for the existing and new entitlements by over £400 million.

To ensure local authorities are fully supported in delivering the new entitlements, the department is funding local authorities an additional four weeks in the 2024/25 financial year, at an estimated cost of £120 million, for the under 2s working parent entitlement starting in September 2024.

Indicative funding allocations for individual local authorities for 2024/25 were published in December 2023 and can be found at: https://skillsfunding.service.gov.uk/view-latest-funding/national-funding-allocations/DSG/2024-to-2025. Funding allocations for local authorities for 2025/26 will be announced in the autumn.

The department’s statutory guidance for local authorities sets out that government funding is intended to deliver 15 or 30 hours a week (for 38 weeks of the year) of free, high-quality, flexible childcare. The guidance can be found here: https://www.gov.uk/government/publications/early-education-and-childcare--2.

The funding should cover the cost, including core business costs, of delivering this provision. The funding is not intended to cover the costs of meals, other consumables, such as nappies and sun cream, additional hours or additional services, such as trips and specialist tuition. However, as set out in paragraph A1.33 of the guidance, such charges for consumables or additional services should not be made a condition of accessing a free place. The statutory guidance for local authorities also specifies that local authorities ensure that providers do not charge parents top-up fees or require parents to pay a registration fee as a condition of taking up their child’s place. Providers who choose to offer the free entitlements are responsible for setting their own policy on providing parents with options for alternatives to additional charges, including allowing parents to supply their own meals or nappies, or waiving or reducing the cost of meals and snacks.